Global markets took a hit as a hawkish tone from U.S. Federal Reserve officials doused hopes for a December rate cut, while a still-messy data calendar and worries about an AI bubble added to the edgy mood.

Wall Street futures were in negative territory after yesterday’s steep selloff. Dow futures were down 0.17 per cent, S&P 500 declined 0.22 per cent and Nasdaq futures were 0.47 per cent lower as of 5:30 a.m. ET.

TSX futures followed sentiment lower after Canada’s main stock market posted its biggest decline in seven months, with tech stocks leading the fall.

In Canada, investors are getting results from George Weston Ltd., MDA Space Ltd., Artis REIT and Keyera Corp.

“Until we get the delayed data, we are in a holding pattern,” said Jeremy Stretch, head of G10 FX Strategy at CIBC Markets in London.

“We are back to 50-50 on a December rate cut and this, alongside concerns about an AI bubble, have destabilized sentiment.”

Overseas, the pan-European STOXX 600 was down 1.33 per cent in morning trading. Britain’s FTSE 100 slid 1.57 per cent, Germany’s DAX gave back 1.19 per cent and France’s CAC 40 retreated 1.14 per cent.

In Asia, Japan’s Nikkei closed 1.77 per cent lower, while Hong Kong’s Hang Seng dropped 1.85 per cent.

Oil prices climbed, boosted by supply fears after a Ukrainian drone attack hit an oil depot in a major Russian export hub, the Black Sea port of Novorossiysk.

Brent crude futures rose 2 per cent to US$64.25 a barrel, while West Texas Intermediate (WTI) crude advanced 2.2 per cent to US$59.99 a barrel.

“The intensity of these attacks has increased, it’s much more often. Eventually they could hit something that causes lasting disruption,” said Giovanni Staunovo, commodity analyst at UBS. The market is trying to assess the impact of the latest attacks and what this means for Russian supply, he said.

In other commodities, spot gold was down 0.1 per cent to US$4,166.91 an ounce. Bullion is up 4.2 per cent so far this week. U.S. gold futures for December delivery eased 0.6 per cent to US$4,170.10 an ounce.

The Canadian dollar weakened against its U.S. counterpart.

The day range on the loonie was 71.18 US cents to 71.34 US cents in early trading. The Canadian dollar was down about 0.15 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, gained 0.19 per cent to 99.34.

The euro slid 0.14 per cent to US$1.1618. The British pound fell 0.36 per cent to US$1.3144.

In bonds, the yield on the U.S. 10-year note was last up at 4.131 per cent.

*Note: Scheduled U.S. data reports may not be released as federal services slowly return after the end of the government shutdown.

China retail sales, industrial production and fixed asset investment

Euro zone GDP and trade surplus

8:30 a.m. ET: Canada’s manufacturing sales and new orders for September.

8:30 a.m. ET: Canadian wholesale trade for September.

8:30 a.m. ET: U.S. retail sales for October.

8:30 a.m. ET: U.S. PPI for October.

10 a.m. ET: U.S. business inventories for September.

With Reuters and The Canadian Press